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January 28, 2009

To Steer or Not to Steer--Right Here in Our Own Backyard

The New York State Insurance Department has been conducting an investigation to determine whether auto insurers in the state have engaged in a widespread effort to steer consumers to certain auto body shops (as we all know, a violation of state law). Their final decision is that insurers did not "systematically" steer consumers to designated shops.

However, they still found isolated cases of non-compliance. Which included the following (quoted directly from their press release):

Required of some customers that a damaged vehicle be inspected at that company’s drive-through facility, in apparent violation of a regulation requiring this inspection to take place at a time and place “reasonably convenient to the insured”;

Set a “goal” of having 45-60% of repairable vehicles repaired at network shops; and

Told an insured to bring his car to a network shop for inspection, and stated that the repairs could be done there, while another claim representative said repairs could be done at the network shop in half the time an out-of-network body shop would take.

These examples show that while insurance companies may understand the law, they are still complicit in allowing bad/illegal information to be presented to the consumers by their staff. Training at all levels would help eliminate the above incidents and foster a better relationship between the shops in our home state and the insurance companies who operate here as well. What else would it take to bring clear ethics to the field?